Housing Unaffordability Increases the Risk of Mortgage Defaults in Australia
A new report has been revealed by research company Moody’s, that shows the risks of mortgage defaults grows up due to lack of housing affordability.
As per the report, “Housing affordability in Australia has “deteriorated significantly” over the 12 months to October 2015, especially in Sydney, where affordability is the worst it has been in 14 years.”
If we talk in general, Aussies spent an average of 29.3 per cent of their monthly income on monthly mortgage repayments as noted on 30 October 2015, whereas last year the percentile was 28.2 per cent. But in Sydney, Aussies spent an average of 39.2 per cent of their income on mortgage repayments as noted on October 2015, but last year the rate was 36.1 per cent. This amount has occupied the highest level since the year 2001.
At this Natsumi Matsuda, a Moody’s analyst, says, “Despite the average standard variable rate being well below the 10-year average, but low interest rates have failed to counteract worsening housing affordability, causing an increased risk of mortgage defaults. The average standard variable interest rate was 5.45 per cent as of October, compared to the 10-year average of 7.07 per cent”.